Residential property claims and family claims – are you due a windfall?

Maintaining your home and having a family is time consuming and expensive and HMRC understands that. There a lot of outgoings during the tax year that you can offset against your income tax. There are also ways to claim money back from the taxman and Mr Financial explains below.

Residential property claims and family claims – are you due a windfall?

HOME MAINTENANCE AND FAMILY CLAIMS / RELIEF

With your home, there are costs associated with maintaining a property that can be reclaimed or set against income tax. Also, with your spouse and children there are tax reliefs and refunds of which you should be aware. For example, if you have a student loan, you might be due some money back.

COUNCIL TAX – MIGHT I BE DUE A REFUND?

When you pay council tax, many people don’t know that you pay in advance, sometime annually, mostly monthly. That means that when you move home, you’ll probably be due some money. Some councils refund before closing the account, others do not. Public figures say there’s at least £230 million in overpaid tax sitting in councils’ accounts!

You might also be owed money if you forgot to cancel your payments to the council – this is likely to be a standing order. A standing order continues until you order your bank to stop it.

Occasionally, you can be owed a refund if the house you used to live in is rebanded. If the new owner/tenant has successfully applied to lower the tax band, that technically means you overpaid when you were the owner/tenant. This will take some digging … but it would be worth it.

CLAIMING FOR HOME REPAIRS AGAINST YOUR TAX

The main issue is what exactly you’re doing; is it repairs or improvements?

“Repairs” are adjustments that maintain a property, while “improvements” enhance, and potentially increase the value of, the property.

Repairs are tax deductible, improvements are not. There is of course overlap and so the deciding factor is the actual purpose of the project and whether there’s been a substantial increase in the home’s value.

Some examples of tax-deductible repairs include exterior and interior painting and decorating, stone cleaning, damp and rot treatment, replacing roof slates, flashing and guttering and mending broken doors, windows, furniture, and appliances.

SELF-EMPLOYED? YOUR HOME COSTS MAY BE DEDUCTIBLE IF YOU WORK FROM HOME

If your home is your business premises – you can deduct some of the running costs (you need to be careful and allocate when it’s your home and when’s a business and apportion accordingly) from your income tax.

MARRIAGE (OR CIVIL PARTNERSHIP) TAX ALLOWANCE

Since April 2015, married couples and civil partners are entitled to the 'marriage tax allowance'. This means that if one person works and the other does not, tax allowances can be transferred between each other. It’s worth almost £300 per year and you can claim for previous years so absolutely it’s worth exploring, if you’re married.

UNIVERSITY GRADUATE REPAYMENT REFUND

If you are a student who began studying in higher education in or after 1998, the rules are that you only need to repay your student loan from the April after you graduate and even then, only if you earn enough to meet the repayment threshold. Hundreds of thousands of students were repaying too early and are due a refund for that time. You may be one of them so it’s worth going back over your bank statements. The best way to do that is by ringing the student loans company website and explain the situation to them.

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